Talk of a universal basic income has been in the news a lot recently, but what does it all mean? First off, it’s important to make the distinction between free money and services that comes from your taxes – the money for a universal basic income has to come from somewhere, so it’s not free money but rather a useful return for your tax payments. The idea is to level the playing field as much as possible in an effort to eliminate poverty and give families a fighting chance in a world where the cost of living has long since surpassed any positive movement in wage growth. What’s more, the idea of a universal basic income is not a new one at all.
As far back as 1516, Thomas More wrote about the idea of a basic income in Utopia. More surmised that this type of social program would prevent people from becoming desperate enough to steal to feed themselves and their families, eventually becoming swept up in a criminal life that would turn them into corpses.
Later in 1796, Thomas Paine suggested in Agrarian Justice that providing a basic monetary endowment for every adult over the age of 21 would lessen the burden of transitioning from a landed gentry economy to a more egalitarian economy.
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In 1967, the Reverend Dr. Martin Luther King, Jr. proposed a universal basic income by which poverty could be eliminated, thus giving African Americans the ability to achieve their potential as well as economic stability.
Rather than making these payments in vouchers, goods, or services, the main idea is that in order to give people the most benefit in terms of freedom of choice in work, lifestyle, and education these payments would have to be made in the form of cash payments. The ultimate goal is to end poverty and lessen violence, crime, and addiction thought the elimination of hopelessness. But can it actually work?
There are several ways that have been proposed to pay for this system. A flat tax would basically take a percentage of everyone’s money and then give them back the same flat rate – a basic redistribution of wealth. A VAT, or value-added tax, would be a high tax on certain goods and services, usually those that are considered to be vices or luxuries, which would go into a fun to make these payments.
Already there are several places around the world that are testing this idea with varied results. Throughout this year in Stockton, California, 100 randomly selected people are receiving stipends, while over the last two years in The Netherlands test groups are receiving varying levels of stipends and benefits. While these programs are still ongoing, Finland found great success with its own pilot programs, including increased confidence in recipients’ financial situations, greater optimism for the future, and better health, but declined to continue the program after the test due to a lack of impact on employment.
Regardless of the inconclusiveness of these tests, a universal basic income may be the only thing that prevents mass poverty as artificial intelligence and automation take over jobs in the next industrial revolution. Jobs will be both created and eliminated, but it will take time to get the right people into the right jobs just as it was during the last major industrial revolution. While it’s not a perfect solution, a universal basic income might be the best tool we have to make the transition smoother.
Learn more about the pros and cons of universal basic income here.
Author Brian Wallace Bio: Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency based in Louisville, KY and Cincinnati, OH which works with companies that range from startups to Fortune 500s. Brian also runs #LinkedInLocal events nationwide, and hosts the Next Action Podcast. Brian has been named a Google Small Business Advisor for 2016-present and joined the SXSW Advisory Board in 2019.
In July 2016, the Liberal government of Justin Trudeau introduced Unconditional Basic Income to Canada and never mentioned it to anyone.
6.4 million Canadians can count on benefiting from about $500, tax-free, every month, no questions asked. It contributes $46 billion per year to GDP and adds $4 to GDP for every dollar it costs.
It’s called the Canada Child Benefit (CCB).
Why have we not heard that this program is, in fact, a Basic Income? When the Ontario government announced the abrupt cancellation of the Basic Income Pilot Project involving 4,000 low-income people after a few short months, it was all over the news. A permanent nationwide Basic Income involving 6.4 million Canadians and their parents (19 million people in total) runs for three years with stunning success and not one word in the press.
Indeed, I have spoken with many Liberal Members of Parliament who all express dismay and disappointment at the lack of visibility the CCB has among their constituents. Yet Canadians know how Basic Income works because one has existed for close to 70 years.
“In 1951, following an amendment to the British North America Act to permit the federal government to operate a pension plan, the Canadian Parliament passed the Old Age Security Act, which provided a universal pension, or demogrant, of $40 per month financed and administered by the federal government. All Canadians aged 70 and over who could meet the more liberal residence requirements were eligible, regardless of their other income or assets. Pension payments began in 1952 and were taxable.”[emphasis added]
Who was in power in 1951? Louis St. Laurent’s Liberals!
Why focus, in this discussion, on only one Party? Is that partisan politics? Some background:
The October 21st election is the perfect crucible in which to forge a new narrative about Basic Income in Canada. The centre-left Liberals of Justin Trudeau, whose father was prime minister from 1968 to 1984, swept into power in 2015 after a decade of Conservative rule. The progressive New Democratic Party is thinking about Basic Income on a 30-year timescale. The Green party is demanding more tests. Only the Liberals can point to action, although they refuse to admit it.
So, while Liberals can legitimately claim both a long history and recent accomplishments in implementing permanent Unconditional Basic Income programs (UBI), the public has no idea that here are two examples of highly successful implementations, hiding in plain sight! Both were introduced by Liberal governments and no one knows about it.
There is no mainstream recognition that Basic Income is a fait accompli in Canada. Sadly, many of the cognoscenti also resist this paradigm shift.
Yet a recent independent report sponsored by UBIWorks, shows that the CCB is not only an Unconditional Basic Income, but it is also a highly successful one for families and the economy. The report makes the following key points:
Canada has demonstrated the effectiveness of a national-scale Basic Income
6.4 million Canadians benefit from about $500, tax-free, each month
The CCB directly touches approximately 19 million people. This not a test.
The CCB is an ongoing national program that has been running successfully for over 3 years
The CCB contributes $46B annually to the Canadian economy – exceeding the economy of Nova Scotia
CCB-related spending drives $85B / year in revenues and $18B in gross profits to businesses
453,000 full-time equivalent jobs are contributed by the CCB, 2.5% of the Canadian labour force
Every dollar invested drives $2 of GDP and more than 55 cents of is recouped in taxes from economic activity
Therefore the CCB drives $4 of GDP for every net dollar it costs
The CCB has generated $27B in private capital investment and $77B in wage growth since its inception
The CCB has contributed to 3 years of economic growth, low inflation, and unemployment levels at record 40-year lows
Clearly, the Canada Child Benefit is a Canadian flavoured Basic Income which is as close as it gets to a UBI in the real world. It is a huge success hiding in plain sight. it is individual because strictly based on headcount and it is unconditional because you do not have to do anything special to deserve it, and you can do with it as you please, no questions asked. Furthermore, it is a regular, predictable, cash transfer paid monthly, for which you can sign up before you are even born. It is not means-tested. However, it is income-tested, which means wealthier families are phased out from the benefit. Does it deviate in some ways from the ideal, orthodox form of Basic Income? Of course! Where do we find ideal forms in the real world?
A similar demonstration can be made for Old Age Security. Since the facts show the economic impact of Basic Income for ages 0-17 and 65+, why not expand the programs to all those in between? Why not start right away with ages 18-19, who need the money to stay in school or get a good start in life, some other way?
As the incumbent Liberals struggle in the polls and are headed toward a minority government status in the October 21st elections, according to the latest projections, Basic Income advocates around the world can only look on in dismay at this missed opportunity to benefit from changing the narrative about Basic Income in Canada.
Although the nomenclature of Unconditional Basic Income (UBI) is notoriously anarchic, clearly the federal Liberal Party of Canada was considering such a plan. In the article, the Canadian Press reports:
“Prime Minister Justin Trudeau and Social Development Minister Jean-Yves Duclos have argued that the Liberal-created Canada Child Benefit, among other measures, amounts to a guaranteed minimum income already.”
Yet not a word about this, 28 days into the campaign, as I have reported above.
Unconditional Basic Income was never mentioned even if there is no question that it helps reduce poverty. This is just not the best argument to support it when powerful economic data is available.
Why the Trudeau Liberals have chosen not to play the UBI card, I couldn’t say. They may come to regret the mistake.
Ten years after the Basic Income Grant pilot project in Otjivero, we are glad to announce that a new book has just been published by the Namibian Economic & Social Trust in Windhoek tonight:
You can download the book in pdf or as epub (eReaders) through the following links:
Together with Engelhard Unaeb and Herbert Jauch we have conducted this series of interviews with residents of Otjivero in the beginning of 2019. This publication aims to give a voice to the people at the centre of the BIG pilot project who experienced what changed and what remained after the BIG ended and how their lives look like ten years later. The publication highlights the political developments since the pilot project. Most importantly it provides a long term analysis of the effects of a Basic Income on household and community level from the perspective of the people concerned. This publications wants to ensure that the people’s voices and opinions are heard.
It is our hope and prayer that this book will help to refocus the debate on the urgency for an immediate implementation of a basic income for all!
I was privileged to attend the Basic Income Earth Network (BIEN) 2019 Congress just now where I drew attention to the role of complementary currencies and attempted to dispel any fantasies about the role of blockchain in transferring wealth.
I’ve always supported Basic Income (BI) in principle. It is probably the most direct possible strategy to address the perennial problems of poverty and inequality. It works by giving enough money to live to everyone, effectively putting a floor on poverty, and taking away the fear and want that drives people to underprice their labour. It is unconditionality makes it cheaper to administer than a normal social security system.
This week I learned that there have been plenty of trials, and they consistently demonstrate the above benefits in addition to others like empowering women (at least in India) and helping people to invest in their own livelihoods.
After a week of conversation as an outsider to the movement, I want to record here some other thoughts, which I hope may be of value.
1. The term:
It must have taken years of debate to settle on ‘Basic Income’ so maybe my thoughts on the matter are nothing new and too tardy. The term Basic Income does not express (to me) the intention that it should be enough to live on. Because the term ‘basic’ does not at all imply ‘sufficiency for living’ there is nothing to stop politicians issuing any paltry sum and calling it ‘Basic Income’. On the surface, it would be a victory but it could lead to conflict in the movement and bad public relations, especially if results were disappointing. I am reminded of what happened in microfinance, which was a fabulous idea for charitable lending to the poor which became something entirely different and less effective as it scaled and had to become commercially viable. Also instead of ‘income’ I much prefer ‘dividend’, because it implies the entitlement that the rich, (who most need convincing about these ideas) understand so well. Dividend also dovetails with the commons discourse, in which so much of the world is enclosed commons which in truth belong to everyone. So language like a social dividend, or a living income, would seem much stronger.
2. BIEN Identity & purpose:
In my time as a complementary currency activist, I have visited several other movements, most of whom are hardly referencing each other. This silo-ing is an easy trap to fall into, especially when the movement is funded to focus on its core issue, and especially when the arguments are technical or complex. Basic income should not build a tribe of fans and advocates for a single universal policy, but about building expertise and disseminating it throughout the social movements as a strategic option for them. BIEN should be a hub of expertise not a force in its own right. I was glad to see some politicians in the congress, and I wasn’t the only complementary currency practitioner, but I would have liked to have seen more people around from the trades union, think tanks, monetary reform, commons, and especially from the movements du jour, Gillets Jaune, Extinction Rebellion and Friday’s for Future. BIEN is conspicuously absent from this list of grassroots movements meeting in Iceland next week.
3. More focus on economics:
It seems to me that more formal economists should be involved in costing BI and anticipating the economic (and social) benefits. Economics is needed to justify (though not to determine, I am cynical to say) almost all political decisions today. I would have liked to learn more about the economic effects of increased spending by the poor, like GDP and sales taxes, about how the richest would pay most of their BI straight back into a progressive tax system, and about the longitudinal social benefits when the poor eat better, sleep better and live less stressfully. This is sometimes quantified as ‘social value’ – another expression I did not hear this week. I heard some discussion about how BI is funded, but nothing about modern monetary theory (MMT). Bernie Sanders just announced at $17trn Green New Deal (GND) manifesto pledge which would be funded I think by MMT. Are any basic income advocates advocating MMT?
4. Climate change:
I did not attend all the sessions, but I saw almost no mention made of climate change. The last 18 months have seen an upsurge of concern about the rapidity and the magnitude of climate change and with it much attention to the psychological and social consequences.
5. The big picture:
My largest concern is that BI could be widely implemented in a relatively short time, but because the economy itself is constantly changing and/or because the economy will change in response to BI, it could soon stop working as intended. I read one article on this a while ago, saying that if everyone’s income increased, rents (land rents) would increase commensurately, canceling out the benefit. Upon examination, this turns out to be a whole slew of arguments showing how naive it could be to think we can change the economy with a single intervention. To prevent rent-inflation, they could, of course, be capped, but inflation could also occur in other sectors like utilities, or food, and preventing all that would cause the neoliberals in charge will balk at the idea of such a heavily planned economy.
In some ways, the BI is not very radical, which is part of its appeal of course. Some would argue that it is just a tweak to capitalism, similar to the welfare state, and that capitalism has fundamental problems and must be replaced. The focus on basic income as the solution could leave little room for more radical ideas or different approaches. What if, for example, governments were prevailed upon to ensure that no one in their borders needed to be malnourished or cold or ill alone. This is much more concrete than BI and would deliver similar benefits. it could be achieved using BI or other strategies in keeping with the prevailing ideology.
BI is a strategy, not the goal, a means not an end. It may not be the best means for every country. I still support BI but it seems it is a single strategy amongst many, and that implementing it will not be the end of the struggle between capital and labour, just a step in the right direction.
, Nohad Nassif speaks from the heart, giving the perspective of someone who suffered, on her skin and bones, the injustices and prejudices perpetrated by a patriarchal society, just for being a woman, and of modest means. She skillfully and courageously uses her own life as an example of how many things would be different, had she been given a basic income, as well as everyone else.
The ability to say ‘no’ to jobs and situations, would allow her to take different paths at certain junctions in her life. Also, the power to say ‘yes’ to opportunities and people would be life-changing, where her material necessities are guaranteed as a right.
Nohad, a young Arab woman on her own in the U.S., presents in her book a feminine view over poverty in society. Her insights and reflections also apply to men, in the sense that basic income would also be crucially transforming to them. According to her, a basic income would reduce violence in society and on women in particular.
In Arab Humanist, a well-protected, well-behaved Lebanese girl, Loulou (Pearl in Arabic, meaning precious and hidden), was transformed to an all alone but defiant young woman living in the United States. She now continues her hard-fought path towards freedom, love, and economic security. Hoping, along with many others, to one day become a beneficiary of a full-fledged universal basic income, both a cause and a consequence of a transformed society. A society transformed for the better.
. Schneider and I talk about the myth that the state and the private property rights system benefit ever last citizen and how it is used to justify mistreatment of disadvantaged people in industrial societies and of indigenous peoples around the world. It was recorded on May 23, 2019.
